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Sour Year so Far for Hotels in Greater Philadelphia

By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News

Oct. 22, 2009--With customers bargain-shopping for room rates, the area's hotels continue to have a sluggish year. But they are hoping the World Series appearance by the Phillies will improve their luck.

Last month, Center City hotel occupancy was up 2.4 percent from a year ago, but the average daily rate was down $26.84 a night, pushing revenue per available room 13.2 percent lower, according to figures released yesterday by Smith Travel Research Inc., of Hendersonville, Tenn., which tracks the hotel industry.

Year-to-date numbers were even uglier, as all three measurements of hotel-industry health showed a decrease: Center City hotel occupancy for the first nine months of 2009 was down 4 percent; average daily rate, 12.8 percent; and revenue per available room, 16.3 percent.

"Because of the economy, we are having trouble maintaining the rate," said Ed Grose, executive director of the Greater Philadelphia Hotel Association. "The client is demanding a bargain from hotels and pitting hotels against each other."

For the nine-county metropolitan region that includes the combined Philadelphia airport/stadium area, Smith Travel Research said, occupancy year-to-date was down 7 percent, average daily rate declined 10 percent, and revenue per available room decreased 16.3 percent. Losses were about the same throughout the region.

"The hotel industry in general is struggling," said Brad Garner, vice president of operations at Smith Travel Research.

"It's both from a hotel-demand perspective as well as pricing perspective," Garner said. "The lack of demand . . . has created a situation where there is absolutely no pricing power or leverage in the marketplace."

For the top 25 markets as a group, he said, hotel occupancy was down 10 percent; average daily rate, 12.2 percent; and revenue per available room, 21 percent.

Last month, only the National Association of Broadcasters convention booked at least 2,000 hotel rooms, the standard for a citywide convention. It booked 5,000 rooms.

This month, Center City's 42 hotels got a bump from last week's American College of Rheumatology conference, which booked more than 29,000 hotel rooms for the six-day gathering.

An East Coast World Series between the Phillies and the New York Yankees could be a boon for Philadelphia, the hotel association's Grose said.

The Yankees could clinch the American League pennant as early as today with a win over the Los Angeles Angels. The World Series will not start until Wednesday in the American League city.

Because the Phillies get their chance to try to repeat as world champs, the teams will play here Oct. 31, Nov. 1, and Nov. 2.

"We've already seen an increase in bookings, and due to the close proximity to New York, as well as Philly being a leisure destination for New Yorkers," said Paul Schwartz, general manager of the Sheraton Philadelphia City Center Hotel.

The extended postseason run by the Phillies is already expected to generate more than $17 million in direct spending by visiting fans, media, sponsors, and Major League Baseball partners, said Larry Needle of the Philadelphia Sports Congress, a division of the Philadelphia Convention and Visitors Bureau.

A World Series here could mean up to $3 million in direct revenue through various taxes (i.e. amusement, sales, parking and hotel-room levies), Needle said. "If it's the Phillies vs. Yankees, that number would go up significantly given the proximity to New York.

"It certainly is an inexact science," he said, "but our guess is the increased volume from Yankee fans would offset the fact that the Dodger fans are more likely to be overnighting and staying the whole weekend."

But hoteliers warn that rooms here for a World Series weekend may be already tough to come by.

Center City has 10,466 hotel rooms, and a big group has first dibs on about a quarter of them.

The Infectious Diseases Society of America has booked nearly 10,000 rooms through its four-day conference here from Oct. 29 to Nov.1 -- roughly 2,500 rooms a night.

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Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

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To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer.

Copyright (c) 2009, The Philadelphia Inquirer

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